Ailing department store chain Sears Holdings reached a deal which will enable it to sell up to 140 additional properties as it confronts decreasing sales and losses, probably setting the stage for more store closures.
Sears said Wednesday that it had reached a deal with a U.S. government pension board to regain the right to sell the 140 places that had previously been guarded from such a strategy.
The company is expected to use each of the profits from the sales — projected at $407 million — to finance a pension plan that supports about 100,000 beneficiaries.
Sears did not recognize the stores included in the agreement, which comes after the company already announced closures of over 400 stores.
The retailer was struggling mightily amid stiff competition with discounters, the increase at Amazon.com, and more nimbler rivals.
The accord signed with the Pension Benefit Guaranty Corp. comes as the retailer continues to utilize its own resources to keep the doors open, including selling brands and pledging assets as security.
Sears cautioned Wednesday that it would post a loss of $525 million to $595 million, which would be down from $748 million a year.
Sales at stores open at least a year fell 15.3%. That included a 17% drop for Sears locations and a 13% decline for Kmart stores.
The company said that its performance was better when factoring out a reduction in the amount of Kmart pharmacies along with a decline in the quantity of consumer electronics for sale at its stores. The retailer also said Wednesday that it had reached its 2017 target of reducing $1.25 billion in costs, which has included closing the doors at hundreds of stores.
“This agreement with the PBGC is another positive step forward which, upon closing, will provide our company with financial flexibility while supporting our commitment to honor our obligations to the associates and retirees covered by the pension plans,” Sears CEO Edward Lampert said in a statement.